TMI Blog2021 (10) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. Thus, in the absence of new facts coming to the knowledge of the AO subsequent to the original assessment proceedings, the reopening could not have been done on the same materials - from reasons for reopening, it is evidently clear that all the materials have been culled out from the return of income filed by the assessee and the Annexure thereto. Thus, the impugned reassessment proceedings, having been done with the same set of facts which were available during the regular assessment, is to be held to be a clear case of change of opinion. Delay in furnishing the reasons - Notice u/s 148 was issued on 29.03.2018. The assessee within 30 days by their letter dated 27.04.2018 had sought for reasons for initiating the reopening proceedings. AO did not furnish the reasons nor responded to the said letter, but proceeded to issue the notice under Section 143(2) dated 21.08.2018 - assessee submitted another letter dated 27.08.2018, requesting for furnishing the reasons for reopening. It is only thereafter, the reasons for reopening were furnished vide letter dated 30.08.2018. It is not clear as to why there was such a delay in furnishing the reasons. As in the case of GKN D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of setting aside the reopening proceedings and if the reasons furnished for reopening of assessment provide any new information or material or based on different dimension under the provisions of the Act, which was not considered by the Original Authority, then the reopening of assessment is permissible. 5.This finding rendered by the learned Single Bench does not reflect correct legal position. In this regard, we may refer to the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax v. Kelvinator India Limited reported in 320 ITR 561 SC , wherein, it has been held that, one needs to give a schematic interpretation to the words reason to believe , failing which, Section 147 of the Act would give arbitrary powers to the Assessing Officer to reopen the assessment on the basis of mere change of opinion , which cannot be per se reason to reopen. Further, it was pointed out that the conceptual difference between the power to review and power to re-assess has to be kept in mind; the Assessing Officer has no power to review, he has power to re-assess, but reassessment is to be based on fulfillment of certain pre-conditions and if the conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the income under the head profits and gains from business or profession, the assessee stated that, on this very issue, the Assessing Officer issued notice under Section 142(1), dated 11.08.2016, and directed the assessee to furnish specific information in respect of Details of loss from foreign currency fluctuation and the assessee has submitted the ledger account pertaining to Effect of exchange differences on translation of forward contracts (unrealized) vide their submission dated 16.09.2016. Further, the assessee had furnished by letter dated 21.09.2016, the ledger account pertaining to the expense in a Compact Disk, upon specific request made on the Assessing Officer. Further, the assessee, vide letter dated 26.12.2016, furnished the detailed submissions on the allowability of Mark-to-Market losses on outstanding forward contracts as a deduction in computing income under the head profits and gains of business or profession . Thus the assessee submitted that the said issue was taken into consideration while completing the assessment under Section 143(3) of the Act. 11.On the 3rd issue with regard to Repairs and Maintenance pertaining to computer software, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the Assessing Officer, while disposing of the objections by order dated 16.10.2018, did not examine any of these aspects, but merely observed that the Assessing Officer nowhere left the traces for verification of the issues, therefore, it does not tantamount to change of opinion. This finding is wholly unsustainable. In other words, the Assessing Officer, while disposing of the objections by order dated 16.10.2018, has accepted the fact that the grounds on which the assessment was reopened were verified by his predecessor, while completing the assessment under Section 143(3) of the Act. If such is the understanding of the Assessing Officer, then we have no hesitation to hold that the reopening is a clear case of change of opinion. 15.The assessee, in their objections, had also referred to the Circular issued by the Central Board of Direct Taxes, vide Circular No.549 dated 31.10.1989, wherein, it was clarified that a mere change of opinion cannot constitute a reason to believe under Section 147 of the Act so as to justify the reopening of assessment. 16.Thus, in the absence of new facts coming to the knowledge of the Assessing Officer subsequent to the original assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
